Newcore Gold hits high-grades at Enchi, eyes resource upgrade, pre-feasibility in 2025

Newcore Gold (TSXV: NCAU, US-OTC: NCAUF) on Tuesday reported strong drill results from its Enchi gold project in Ghana, showing wide mineralization at the Boin deposit.

Key intercepts included hole KBRC316’s 96 metres grading 1 gram gold per tonne from 100 metres depth, with a high-grade section of 10 metres at 2.1 grams. Another, in hole KBRC313, returned 81 metres at 1.1 gram per tonne, including a 17-metre higher-grade section at 2.5 grams gold and another 7 metres at 2.2 grams.

The 10,000-metre drill program focuses on upgrading 607,000 oz. of inferred resources at Boin to the indicated category. The deposit is about 290 km west of Accra, Ghana’s capital, in the Bibiani shear zone. Analysts said the results confirm the continuity of the deposit’s mineralization. It reinforced the company’s vision of advancing Enchi into a low-cost, open-pit heap leach operation.

“Though mostly confirmatory, the results demonstrate good continuity,” Canaccord Genuity analyst Peter Bell said in a Tuesday note.

The Boin deposit is the second-largest prospect at Enchi with 28.9 million tonnes at 0.7 gram gold per tonne and shows potential as Enchi advances along the “value curve”, according to the analyst.

Growing relevance

The 248-sq. km property hosts five deposits and over 25 untested exploration targets. Next, Enchi plans to update the resource estimate and finish metallurgical tests. The company aims to start work on a pre-feasibility study this year.

“This drilling not only builds confidence in the resource but also demonstrates the opportunity to grow ounces and deliver a project with compelling economics,” Newcore’s CEO Luke Alexander said in a news release.

Canaccord Genuity rated Newcore a speculative buy. It cited strong project fundamentals and potential in its value. The analyst’s price target is 90¢, well above the last bid in Toronto at 31¢. Shares have ranged between 10¢ and 39¢ over the past 12 months and it has a market capitalization of $65 million.

Adding project scale

An updated preliminary economic assessment (PEA) last April pegged the initial capital cost for Enchi at US$106 million. It plans a 9-year, 8.1 million-tonne-per-year open-pit, heap-leach mine. The all-in sustaining costs are forecast at US$1,018 per ounce.

The study raised Enchi’s net present value by three-quarters to US$371 million. It also boosted the internal rate of return to 58% at a gold price of US$1,850 per ounce. According to the PEA, Enchi could produce 121,839 oz. annually, a 36% increase over prior forecasts.